The 02/20/23 Blog “Long-term Elliott Wave Count for Gold” examined the Elliott wave structure for Gold in U.S dollars from 1969 to 2023.
The weekly Gold chart courtesy of Trading View (XAUUSD) illustrates a potential Elliott wave count from 2011 to 2023.
The 02/20/23 blog noted that the Gold peak in 2011 could either be a Cycle wave “III” top or a Primary wave “1” – boxed peak. For simplicity this chart has the 2011 high as the lower degree Primary wave “1”.
After the major bottom made in late 2015 the Elliott wave count has been ambiguous. Note the sideways wedge pattern from December 2015 to August 2018. It’s possible that an Elliott wave – Horizontal Triangle formed from September 2011 to August 2018. If so this structure could be Cycle wave “IV”. The 02/20/23 blog noted that the 4- year decline from 2011 to 2015 was unusually short compared to what is probably Cycle wave “II” from 1980 to 1999 – 19 – years.
If Cycle wave “IV” ended in 2018 the Cycle wave “IV” to Cycle wave “II” ratio would be 7/19 or .368, a more likely wave “IV” to “II” proportion. Whichever wave count is correct it is not relevant, both counts imply a move to new all-time highs. If the Primary wave “1” count is in effect it implies a much larger and longer Gold bull market that could continue into the next decade.
Another uncertain factor is that the peak made in August 2022 is slightly lower than the top made in August 2020. This is referred to as a Truncated fifth wave. This occurs when the presumed wave “five” fails to exceed the termination point of wave “three”. Truncated waves are a problem when analyzing wave structure. In this case it’s possible the movement from August 2020 top to the bottom made in September 2022 could be a corrective pattern. The answer to which wave count is correct may not be known for several months or years. Like the ambiguity caused by the potential Horizonal Triangle. Both counts imply a move to a new all-time high, only the duration of the bull move could be effected.
Elliott waves represent the “mass mind”, and the mass mind like an individual mind can change direction. Alternate wave counts represent the mass mind’s potential to change direction.
The Elliott wave action from the March 2022 top to February 2023 is much easier to analyze and could present a fantastic opportunity to go long Gold.
The next blog will examine the Elliott wave count from March 2022 to February 2023.